Question

a company is selling used office quipment for $12000 they purchased it 2 years ago for $50000 what is the gain or loss on the sale

Answer 1

Answer:

( B ) -$18,000

Explanation:

Calculation for the gain or loss on the sale

First step is to calculate for the depreciation of equipment

Depreciation of equipment = ($50,000 - 0) / 5

Depreciation of equipment= $10,00 per year

Second step is to find the value of the asset after 2 years

Value of asset after two year = $50,000 - $20,000

Value of asset after two year Value= $30,000

Third step is to calculate the loss on the selling asset

Loss on selling asset = $12,000 - $30,000

Loss on selling asset =- $18,000

Therefore the loss on the sale will be - $18,000